It started in Davos 2015, where leading executives were challenged to walk up to 13 kilometres a day to raise awareness ad funds for the SRI International Education Study for children in South Africa.
Caroline Anstey herself walked up to 13 kilometres daily, setting the standard for commitment to a project partnership led by Frederick K. Day of World Bicycle relief – Africa. Delegates in Davos committed 2500 specially designed bicycles to be delivered by the World Bicycle Relief to children in the Limpopo Province of South Africa. The initiative goes towards the study by the SRI International, to provide bicycles to children in remittance to research data that shows travel times to school can be reduced by 75 percent, boosting attendance.
Post the WEF / UBS Press Conference, we sat down for a quick chat with Caroline Anstey of UBS to gain her insight.
Ventures Africa (VA): Caroline, I am intrigued by UBS. Can you explain what ‘Performance Plus’ is about?
Caroline Anstey (CA): Performance Plus is the idea that we can now offer investors both traditional financial returns, financial performance with a ‘Plus’ – and the ‘Plus’ is a social performance to go with it. So, if we think about impact investing, which is a whole new area, is really talking about getting a return, a financial return, but also securing a social or environmental return to go with it.
Traditionally it used to be thought that if you want a trade-off, if you want financial performance and you want sustainability, you will have to take a lower financial benefit. I think more and more now on average there is no difference, no trade-off and you can have both. UBS is saying that if you can have both your financial and social return it is a win-win. The importance of ‘Performance Plus’ is that if you look at the world today, there is not enough public money to solve all the problems around education, renewable energy, green growth – neither is there necessarily enough private institutional money to solve that either.
We need a combination of public, private and large institutional investors, and so if I look at wealth management, UBS is the largest wealth management company, managing $2 trillion worth of assets. So if you take just a small percentage of those and move them into impact investing, where people are getting a social return, and society is getting a societal and environmental return – we could have a big difference. That in essence is ‘Performance Plus’.
VA: It sounds intriguing, but let’s take South Africa as an example. If I am a company investing with UBS but have to comply with B-BBEE (Broad-Based Black Economic Empowerment), how does this affect such companies if they see the merit of impact investing with UBS?
CA: What we at UBS are doing is we are starting in the wealth management area and we are saying that for private individuals, we are going to offer a menu of options. So as they look at their portfolio they can decide, do I want traditional investments, do I want to exclude certain investments from my portfolio, do they want to go for impact investing?Depending on your appetite as a private investor for sustainability or the environment, you can build a portfolio around those options. At UBS we are also offering t screen portfolio’s for sustainability. We have also piloted that where people have done the screening, we found that 80% of them that find in their portfolio hat there areas that they may disagree with i.e. tobacco, they moved their assets. This is important because we are seeing more and more that private individuals are looking to invest alongside their values, especially among young people.
Depending on your appetite as a private investor for sustainability or the environment, you can build a portfolio around those options. At UBS we are also offering t screen portfolio’s for sustainability. We have also piloted that where people have done the screening, we found that 80% of them that find in their portfolio hat there areas that they may disagree with i.e. tobacco, they moved their assets. This is important because we are seeing more and more that private individuals are looking to invest alongside their values, especially among young people.
As more wealth passes down to the millennials, globally thee is $31 trillion that is going to pass down to them, there is bound to be a shift in priority as to where they put their investments.
VA: Let’ take a more pragmatic look at your venture with regard to bicycles for education in South Africa. In selection of the recipients, do they have to have a decent diet, because and as you know, many kids go to school without eating – is this a consideration at all?
CA: The participants were chosen by the local communities, and the local communities set some of the criteria and one of the criteria is distance to walk. On diet I think the implication of your question is, those who had poorer diets, perhaps would not get bicycles because it might sap their energy even more if they are cycling. I don’t think that has been factored into it, but, it is different across communities, and at the moment we are studying the Limpopo Province and there the communities did chose the families based on the distance and need and the families then sign a contract to use the bicycle properly. The study is following up with attendance records, exam records, but also household surveys to really drill down how the bicycle is used and I think your point about nutrition is one that we should factor in.
However as I said before, the bicycle is not a silver bullet to solve all issues. I worked for many years on Haiti where we did school feeding programs and we were feeding 35 000 children a day. Ideally overtime, you bring these things together, but does not undermine the importance of the transport factor which can have a huge impact.
VA: Enterprise Development has a huge failure rate. Impact investing is certainly growing faster. What are your thoughts on CSI investing running parallel to enterprise development?
CA: First of all I think you need different horses for courses or courses for horse, so, you not going to get everything moving in the same direction. However I do think there is a lot of rationale for CSI to focus on ‘Social Entrepreneurship’, and I think what we have seen is local solutions or development has been in the hands of government or the experts. Now we are seeing a democratisation of ideas and some of the best ideas for how to deliver health or education or even local power can come from different walks of life, and we’ve seen this in the tech community with the design of apps that make i.e. mobile banking a reality.
So this idea of empowering social entrepreneurs who come from different walks of life to solve social issues at a local level is very important and that is a clear role for community investment. Of course there going to be a role for enterprise investment and venture capital. But social entrepreneurship is a new phenomenon, which if taken to scale, you can see some of the big movements and enterprise today started as small garage based social entrepreneurs.
We need to find those ideas and be able to scale them up.
